CHALCO(601600)2025-04-01 04:17Summary of Aluminum Corp. of China (Chalco) Earnings Review Company Overview - Company: Aluminum Corp. of China (Chalco) - Stock Ticker: 2600.HK - Market Cap: HK11.3 billion - Enterprise Value: HK21.7 billion - Industry: Basic Materials Key Financial Highlights - 2024 Net Profit: Rmb12.4 billion, representing an 85% year-over-year increase - Earnings Per Share (EPS): Rmb0.723, up 84% year-over-year - Recurring Net Profit: Estimated at Rmb13.1 billion, up 99% year-over-year - Dividend: Proposed final dividend of Rmb0.135 per share, total annual dividend of Rmb0.217, implying a 30% payout ratio for 2024, compared to 21% for 2023 [1][30] Revenue and Cost Analysis - Total Revenue for 2024: Rmb237.1 billion, a 5% increase from Rmb225.3 billion in 2023 - Cost of Goods Sold (COGS): Rmb201.5 billion, up 2% year-over-year - Gross Profit: Rmb35.5 billion, a 29% increase year-over-year - Sales Volume: Aluminum sales volume was 7.60 million tons, up 12% year-over-year, while alumina sales volume was 6.35 million tons, down 3% year-over-year [19][30] Segment Performance - Aluminum Segment: Gross profit declined by 15% year-over-year, primarily due to higher COGS - Alumina Segment: Gross profit increased by 236% year-over-year, attributed to lower-than-expected costs - Energy and Trading Segment: Gross profit decreased by 63% year-over-year due to lower revenue and higher COGS [19][20] Future Outlook and Estimates - 2025E Net Profit: Expected to remain elevated at Rmb11.4 billion, with a stable aluminum output of 7.6 million tons and an increase in alumina output to 22 million tons [2][33] - Alumina Price Forecast: Expected to remain depressed at Rmb3,431 per ton for 2025 and Rmb3,464 per ton for 2026 [2][33] - Aluminum Industry Spread: Anticipated to sustain at Rmb4,830 per ton in 2025 and Rmb4,700 per ton in 2026 [2][33] Valuation and Investment Thesis - Price Target: HK5.12, indicating a 23% upside potential - Valuation Ratios: Trading at a P/E of 6.2 for 2024, with a projected P/E of 7.2 for 2025 [1][36] - Investment Rating: Maintain Buy rating for Chalco-H and Neutral for Chalco-A due to fair valuation [34][35] Risks and Considerations - Downside Risks: Include lower aluminum and alumina pricing, potential removal of capacity caps in primary aluminum, slower-than-expected green demand, and higher supply from recycled aluminum [28][37] - Upside Risks: Include higher pricing driven by improved supply-demand balance and enhanced demand for green technologies [29][38] Cash Flow and Balance Sheet - Operating Cash Flow: Increased by 21% year-over-year to Rmb32.6 billion - Free Cash Flow: Grew by 59% year-over-year to Rmb25.2 billion - Net Gearing: Decreased to 64% from 100% at the end of 2023 [23][30] This summary encapsulates the key financial metrics, segment performance, future outlook, valuation, and associated risks for Aluminum Corp. of China, providing a comprehensive overview for potential investors.